Ola raises $1.1B from Tencent, Softbank

Homegrown cab-aggregator, Ola has raised $1.1 billion in fresh funding from investors including Chinese internet giant Tencent and Japan’s SoftBank expanding its war chest to take on arch-rival Uber.

Ola also disclosed that it was in advanced talks to raise another $1 billion from existing and new investors, thus rounding off what may turn out to be a $2 billion funding round. This is Ola’s biggest funding round since inception and a much-needed one. Following the close of the round, the ride-hailing company could reportedly have a valuation of around $7 billion.

Ola, with a presence in 110 cities across India, said it will use the money to invest heavily in artificial intelligence technology and penetrate new areas of the country. “We are thrilled to have Tencent Holdings join us as new partners in our mission to build mobility for a billion Indians. The transportation and mobility industries are seeing huge changes globally. Our ambition is to build a globally competitive and futuristic transportation system in India that will support and accelerate a nation on the move. Our new partners share our passion for building the future of transportation in India together and we look forward to learn and benefit from their global perspectives and ecosystems,” said Ola co-founder and chief executive officer Bhavish Aggarwal in a statement.

The fundraise couldn’t have come at a better time for Ola as its rival Uber is engrossed in damage control back home. Amidst numerous lawsuits and controversies, the US cab-aggregator recently appointed Dara Khosrowshahi as its new leader but the company’s boardroom battles are far from over.

“Ola’s unique local offerings are tailored to India’s burgeoning transportation needs. The strategic partnership with Ola makes it possible for Tencent to be part of the fast-growing ride-hailing space in the country. We look forward to helping Ola further develop India’s transportation solutions,” said Martin Lau, president of Tencent.